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New auto insurance changes will affect motorcyclists, pedestrians

Motorcycles coming to West Michigan this summer
Ped Saunders
Creative Commons
Motorcycles coming to West Michigan this summer

Attorneys who handle accident claims say Michigan's new no fault law has implications for pedestrians and motorcyclists - and could be especially bad for motorcycle riders.

Brandon Hewitt is COO of Michigan Auto Law.

He says motorcyclists injured in a crash with a car can't make a claim on their own car insurance if they are injured.

They can claim only what the car driver's insurance pays out. 

And starting next year, that amount could be as low as $50,000, if the car driver is a low income person on Medicaid.  

"Riding a motorcycle was dangerous before," says Hewitt.  "Now you have no idea how much coverage is going to be there if you do get injured.  I wouldn't be riding a motorcycle in Michigan, I can tell you that."

Before the law was changed, everyone had unlimited lifetime coverage on their insurance - except in the event of a motorcyclist accident that did not involve another vehicle.

In that case, there is no insurance coverage for that motorcycle rider - either under the old law, or the new.

Hewitt says people should closely consider all the different scenarios in which they could be injured in - or by - a vehicle.  

He says pedestrians hit by a car get their health care costs paid by their own insurance.

So if they choose very low coverage, that is all they can claim, even if the injuries are severe.

And if the pedestrians don't have insurance, instead of making a claim against the vehicle owner's insurance policy, their claim goes to "assigned claims."  That's a rotating pool of insurance companies that agree to pick up certain kinds of claims, spreading the risk among them.

In an assigned claims case, pedestrians could claim up to $250,000.  

"There doesn't appear to be any rhyme or reason as to why they left the involved vehicle out of the situation," says Hewitt.

People will have options in addition to unlimited lifetime coverage starting next summer. Senior citizens on Medicare will have the option of choosing as low as zero coverage; low income people on Medicaid will be able to choose as low as $50,000 coverage; and everyone else can choose $250,000 per accident, $500,000 per accident, or unlimited coverage.   

Hewitt says he thinks most people will choose lower amounts of coverage, simply because they will see very little savings on their auto insurance unless they do.

And he says the catch is that health insurance companies may raise premiums, offsetting any savings to individuals.  That's because health care costs that used to be paid by insurance companies could now end up being paid by health insurance companies.

For more information on the changes, go to attorney Steven Gursten's blog on the topic at Michigan Auto Law.

Updated 7/31/19:  This story was changed to correct the accident injury coverage amounts for low-income drivers on Medicaid, and the rest of the driving population.

Tracy Samilton covers energy and transportation, including the auto industry and the business response to climate change for Michigan Public. She began her career at Michigan Public as an intern, where she was promptly “bitten by the radio bug,” and never recovered.
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